Cross-Cultural Market Research

Primary vs. secondary research. There are two kinds of market research: Primary research refers to the research that a firm conducts for its own needs (e.g., focus groups, surveys, interviews, or observation) while secondary research involves finding information compiled by someone else. In general, secondary research is less expensive and is faster to conduct, but it may not answer the specific questions the firm seeks to have answered (e.g., how do consumers perceive our product?), and its reliability may be in question.

Secondary sources. A number of secondary sources of country information are available. One of the most convenient sources is an almanac, containing a great deal of country information. Almanacs can typically be bought for $10.00 or less. The U.S. government also publishes a guide to each country, and the handbook International Business Information: How to Find It, How to Use It (HF 54.5.P33 [1998] in the Reference Department of the Gelman Library), provides leads on numerous sources by topic. Stat-USA, a database compiled by the U.S. Department of Commerce and available through the Gelman Library (you can access it through the “Links” section of my web-site), contains a great deal of statistical information online. Excellent full text searchable indices to periodicals include Lexis-Nexis and RDS Business and Industry, also available through Gelman.

Several experts may be available. Anthropologists and economists in universities may have built up a great deal of knowledge and may be available for consulting. Consultants specializing in various regions or industries are typically considerably more expensive. One should be careful about relying on the opinions of expatriates (whose views may be biased or outdated) or one’s own experience (which may relate to only part of a country or a certain subsegment) and may also suffer from the limitation of being a sample of size 1.

Hard vs. soft data. “Hard” data refers to relatively quantifiable measures such as a country’s GDP, number of telephones per thousand residents, and birth rates (although even these supposedly “objective” factors may be subject to some controversy due to differing definitions and measurement approaches across countries). In contrast, “soft” data refers to more subjective issues such as country history or culture. It should be noted that while the “hard” data is often more convenient and seemingly objective, the “soft” data is frequently as important, if not more so, in understanding a market.

Data reliability. The accuracy and objectivity of data depend on several factors. One significant one is the motivation of the entity that releases it. For example, some countries may want to exaggerate their citizens’ literacy rates owing to national pride, and an organization promoting economic development may paint an overly rosy picture in order to attract investment. Some data may be dated (e.g., a census may be conducted rarely in some regions), and some countries may lack the ability to collect data (it is difficult to reach people in the interior regions of Latin America, for example). Differences in how constructs are defined in different countries (e.g., is military personnel counted in people who are employed?) may make figures of different jurisdictions non-comparable.

Cost of data. Much government data, or data released by organizations such as the World Bank or the United Nations, is free or inexpensive, while consultants may charge very high rates.

Issues in primary research. Cultural factors often influence how people respond to research. While Americans are used to market research and tend to find this relatively un-threatening, consumers in other countries may fear that the data will be reported to the government, and may thus not give accurate responses. In some cultures, criticism or confrontation are considered rude, so consumers may not respond honestly when they dislike a product. Technology such as scanner data is not as widely available outside the United States. Local customs and geography may make it difficult to interview desired respondents; for example, in some countries, women may not be allowed to talk to strangers.